Relatively lower interest rates (compared to fall 2022), slowing growth in home prices, and builder incentives are making an impact on buyers’ affordability expectations. In the first quarter of 2023, 73% of buyers reported being able to afford less than half the homes for-sale in their markets, down from a record high of 87% in the final quarter of 2022. On the flip side, the share able to afford most homes available doubled from 13% to 27% during this period.
Affordability expectations between the final quarter of 2022 and the first quarter of 2023 improved in all regions. The share of buyers able to afford less than half the homes available in their markets dropped in the Northeast, from 89% to 75%; in the Midwest, from 84% to 73%; in the South, from 83% to 76%, and in the West, from 87% to 66%.
* Results come from the Housing Trends Report (HTR) – a research product created by the NAHB Economics team with the goal of measuring prospective home buyers’ perceptions about the availability and affordability of homes for-sale in their markets. The HTR is produced quarterly to track changes in buyers’ perceptions over time. All data are derived from national polls of representative samples of American adults conducted for NAHB by Morning Consult. Results are seasonally adjusted. A description of the poll’s methodology and sample characteristics can be found here. This is the fourth in a series of six posts highlighting results for the 1st quarter of 2023. See previous post on plans to buy and new vs. existing preferences, and housing availability.